I store a 10mm Colt Auto in a custom radio alarm clock safe on my nightstand next to my bed. The Colt is loaded with a full mag of Hydra-Shocks and two spare mags of Winchester Silvertips reside there as well. I store the gun with a round in the chamber so I do not have to worry about racking the slide in an emergency.

My question is this: Can I leave the hammer down on the loaded chamber or is this bad practice for some reason? And if not, does storing the gun in a cocked & locked state for extended periods of time harm the gun in any way?

Other than being clumsy and slow to bring to action, the hammer down will hurt nothing.
It would take many, many years of being cocked and locked to harm the mainspring in a
1911. My father's WWII vintage gun sat cocked and locked in his safe for over 20 years
and it worked just fine.

If I ever get a dedicated house gun it may have a light rail on it. Until then I'll reach for a flashlight first and live with a little delay to be sure I'm awake. Of course in other places and times I might want the YoBo MSH with the lanyard loop for comfortable sack time. One does what the circumstances call for.

I'm not a fan of lowering the hammer on a live chamber, so I think I would keep it cocked and locked. Compressing a coil spring will not wear it out, it is repeated compression and decompression cycles that fatigue coil springs.

When meant to be in a "combat ready" state the 1911 was designed to be in the so called "cocked and locked" status. The purpose of the C&L is so that when the gun is brought into play to be fired it requires only the safety to be "snicked" off and the trigger pulled. Other labels such as Condition 2, etc. were meant to be descriptive of other states in which a 1911 could be put but not advocating that that status be employed. I too have had 1911 stored in my gun safe for long periods of time cocked and locked with absolutely no ill effect.